London Art Fair organizers are aiming to defy the slump by attracting new collectors and redoubling efforts to lure cash from financiers.

Hedge magazine, Axa Art, Brownhill Insurance Group and the City Women’s Network will be hosting receptions next week for the U.K.’s first major art event of 2009.

The January timing, and the fair’s Islington location in the Business Design Center near the financial district, has encouraged some of the 100 exhibitors to hope for big-ticket spending, never mind the current climate in the capital.

“The Square Mile is a primary focus of the fair,” said director Jonathan Burton in an interview. “There are still people in the City who have money to spend and because of the current situation we’re looking to broaden the client base. This year we’re also collaborating with Tatler magazine.”

Dealers showing at the fair mostly specialize in works by 20th-century and contemporary British artists. They said the event, now in its 21st year, had been the U.K.’s main commercial showcase for contemporary works until the Frieze Art Fair burst on the scene in 2003.

The fair opens with the first sponsored receptions on Jan. 13. Prices for artworks start at 20 pounds ($30.70) for limited- edition videos by emerging artists.

Hirst Prints

“Obviously it’s going to be different this year. There’s been a huge downturn,” said exhibitor Paul Stolper, a London- based print dealer who has commissioned limited-edition works by U.K. artists such as Damien Hirst and Keith Coventry.

“There won’t be so much spontaneous buying and it’ll be difficult bringing new artists,” said Stolper. However, there was still demand for new prints that were “works in their own right” by established artists, he said.

Stolper will be showing “Junk,” a new series of prints by Coventry inspired by food packaging from McDonald’s Corp. and costing 1,000 pounds in a limited edition of 50.

Some of the most highly priced 20th-century British paintings will be exhibited by the London dealer Richard Green. He will be offering abstracts from the 1950s by St. Ives, Cornwall-based painters Peter Lanyon and Patrick Heron at prices of about 300,000 pounds and 600,000 pounds respectively.

Both works have been sourced from a private collection, according to Jonathan Green, the gallery’s managing director.

“At the moment you can still sell the top pieces, but you can’t sell anything else,” said Green. “The market for modern British art is particularly sensitive to the domestic economy.”

The Bank of England yesterday cut its benchmark interest rate to the lowest since the central bank was founded in 1694 as policy makers tried to prevent the credit squeeze from deepening Britain’s recession.

‘Very British’

“It’s a very British fair. It doesn’t change that much from year to year,” said Mike Snelle, director of London-based Black Rat Press, urban art dealers exhibiting for the first time. “The London Art Fair hasn’t got the energy of Frieze or some of the European fairs,” he said. “It does show there are interesting things happening in other parts of the art world.”

At 6 p.m. sharp on the opening night, Black Rat will be releasing “Empire State,” a new print by the Bristol-born artist Nick Walker.

The 3-feet-high colored screenprint, showing the New York skyscraper splattered with graffiti paint, will be issued in an edition of 175, priced at 475 pounds each.

“We’re expecting to sell out the entire edition within the first hour,” said Snelle.

The 2008 the London Art Fair attracted 23,000 visitors, less than half the attendance numbers at Frieze. The fairs do not release total sales figures.

“Ticket sales are currently tracking along the same lines as last year,” said Jonathan Burton.